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DiPiazza back on Charleroi council

Borough Manager Matt Staniszewski said problems with the current budget could create about a $1.1 million deficit by year’s end.

A former Charleroi Councilman who resigned in September 2018 was appointed to rejoin council to fill a vacancy amid a looming budget crisis.

During Wednesday’s council agenda meeting Randy DiPiazza was appointed to fill a vacancy left by Cathy Diess, who resigned last month.

DiPiazza resigned from his seat on council in September 2018, with a simple letter stating, “I quit.”

He was one of three people to submit a letter of interest to fill the vacancy.

Kim Taylor and Danielle Haynes also were interested in filling the seat, but Taylor was the only other candidate beside DiPiazza to secure a nomination.

DiPiazza was nominated by Frank Paterra with council members Larry Celaschi, Paterra, Joe Smith and Paul Pivovarnik voting in favor of his appointment.

Nancy Ellis nominated Taylor, with councilman Jerry Jericho supporting her.

DiPiazza, who did not attend Wednesday’s meeting, is expected to be sworn in before the start of next week’s voting meeting.

Financial woes

DiPiazza will be joining council amid a financial crisis, according to Borough Manager Matt Staniszewski.

During his presentation to

CHARLEROI • A2 FROM A1 council, he explained the 2022 budget was balanced at approximately $2.6 million and kept current millage at 6.85.

At the time, Jericho, Ellis, Pivovarnik and former council members Mark Alterici, Jeannine Motycki and Jody Cheplic all voted in favor of the spending plan.

Paterra was absent from the Dec. 15, 2021 meeting when the budget was approved.

On Wednesday, Staniszewski drew attention to the borough’s financial status, which could put the borough in a pinch when it comes to operation by year’s end.

According to Staniszewski, who is working on the 2023 preliminary budget, to date, 93.4% of the borough’s anticipated $2,637,677 in revenue has been collected.

Of that, the single largest revenue line item is real estate taxes, with $684,000 budgeted for 2022 and $629,559 collected so far.

With the remaining revenue expected to come in through the last quarter of the fiscal year, Staniszewski said revenue collected will be “relatively flat” but could put the borough in a tough spot with limited revenue to meet expenses throughout the remainder of 2022.

“To date, Charleroi has spent 91.5% of it’s allocated budget, considering quarter four just began, this number should be closer to 70% in a more perfect world, but it’s not a problem unique to Charleroi. But, with one more quarter to go, cash flow could be a problem moving forward.”

Staniszewski said if the fiscal year ended Wednesday, the borough would show a balance of $43,623 on paper, but that doesn’t show the entire financial picture.

Primarily, he said, there are inter-fund transfers that were not accurately reflected in the 2022 budget.

And, in January, when Celaschi attempted to reopen the budget to take a look at the numbers and make corrections, it did not pass by a vote of council.

Now, Staniszewski said, there were influxes of cash from other funds listed to offset shortfalls or cash flow, but those line items to account for inter-fund transfers were not included.

“In other words, there is more money going into the general fund from other funds than it appears on paper to cover the cash flow and short falls,” he explained. “Contracts were awarded in 2021 without funding to pay for them in 2022.”

With several unfunded obligations in the 2022 spending plan, when council accepted the 2022 budget last December, it created a deficit of at least $478,644 at the time it was adopted, Staniszewski said.

Some of the largest offsets were for equipment, which is currently sitting at a $97,986 deficit, highways which was is currently $288,491 over budget and could increase, engineering costs for MS4 are $71,360 over budget and d/s principal which is $20,085 over.

Highways, which represents the borough’s paving project, could increase in costs by over $50,000, putting the borough further into the red.

With more than $470,000 in unbudgeted items to pay for by year’s end, and an additional $650,000 needed to cover monthly costs and obligations, the borough is looking at a roughly $1.1 million deficit in 2022, Staniszewski said.

“That figure does not account for inter-fund transfers, further exasperating the deficit beyond this figure,” he said. “The 2022 budget also provides no opportunity to build cash reserves, capital and community investment or maintain municipal service delivery at its current level.”

Celaschi questioned how the previous council was able to pass a budget with such a large deficit.

“I don’t have an answer for that,” Staniszewski said. “The budget (2022) is worth about as much as the paper it is written on.”

Jericho said there was “no way” former council members would have adopted a budget that was “that wrong.” “It’s not possible,” Jericho said. “That has never happened in all of my time on council. I would like to hear what the auditor has to say.” “You can next week. This is clear as day. It’s in black and white. I am just telling you where the borough stands,” Staniszewski said. “Don’t get mad at me. It’s in black and white. It is what it is. I can’t help it if there was poor financial management.”

Pivovarnik also seemed confused at the numbers, claiming the borough manager at that time or borough secretary should have known what was happening.

“Your budget is whack,” Staniszewski said. “It is a hot mess. There is a breakdown every month of profit and loss. It is in your packet right now. The exact reason this happened is because it was never discussed. This is the current state of things and we are trying to come up with realistic and reasonable solutions moving forward.”

Staniszewski said he plans to present a preliminary spending plan to council next week that he hopes will show improvements to cash flow, but there is work to be done. The borough will also start attending budget workshops as needed, with the anticipation of announcing the first reading of the budget Nov. 9 and formally adopting the spending plan Dec. 14.

“Revenues need to be increased to simply maintain services,” he said. “Council needs to explore all options to provide taxpayers a balanced budget with the opportunity to invest back into the community and improve quality of life.”

“Your budget is whack. It is a hot mess…This is the current state of things and we are trying to come up with realistic and reasonable solutions moving forward.”
MATTHEW STANISZEWSKI
CHARLEROI BOROUGH MANAGER

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